Impact of Social Compliance on Conflict Management in the Readymade Garment Industry

Abstract

In the global ready-made garment (RMG) market, there is intense competition. To combat ethical issues in the supply chain, vendors have created compliance regulatory standards. Suppliers must also monitor, enforce, and disclose compliance. Therefore, the global garment industry exerted pressure on suppliers from developing countries to implement a code of conduct (CoC) that emphasized social responsibility. The apparel industry has discovered that this Code of Conduct is a valuable instrument for monitoring the compliance activities of its suppliers. Compliance is essential to the prosperity of any RMG organization, according to studies. Studies indicate, however, that it fails in the apparel industry because purchasers may exert pressure on suppliers to prioritize cost savings over non-compliance. Also, demand places suppliers under unnecessary pressure. It cannot, therefore, be used in the fashion industry. Consequently, both positive and negative compliance studies inspired this study. This research is based on contingency theory. The findings of this study illuminate the significance of the connection between social compliance and labor instability in Bangladesh's RMG industry. This study also proposes that Bangladeshi textile companies should have normally utilized lean manufacturing techniques to increase output in accordance with new regulations, despite social compliance challenges. The data in this quantitative investigation were analyzed using Statistical Package for the Social Sciences (SPSS) and Partial Least Squares Structural Equation Modeling (PLS-SEM). Simple random sampling was used to acquire data from 384 employees using survey techniques.